Abandon Nvidia: Discover How This Index Fund Can Multiply Your $50 Monthly Investment to Over $100,000

Abandon Nvidia: Discover How This Index Fund Can Multiply Your  Monthly Investment to Over 0,000

Nvidia The stock has proven its ability to generate significant gains over the long term, rising more than 1,800% over the past five years. And the company’s dominance in the artificial intelligence (AI) chip market — with an 80% share — could continue to drive the stock higher over time.

But investing in a high-growth stock like Nvidia carries some risk, and it’s important for investors to carefully monitor company and industry news as well as earnings reports. Nvidia therefore remains an investment opportunity, but it may not be the right one for everyone.

I have some good news, though: There are plenty of other ways to grow your wealth, and one of them is actually less risky and requires minimal effort. In fact, all you need to do is set aside $50 per month and, over time, your investment could exceed $100,000. I’m talking about investing in an index fund. So forget Nvidia and let’s find out more about this simple and potentially explosive strategy.

Abandon Nvidia: Discover How This Index Fund Can Multiply Your  Monthly Investment to Over 0,000

Image source: Getty Images.

An investment in the S&P 500

Which index fund should you buy? The one who imitates S&P500and a good example is SPDR S&P 500 ETF Trust (NYSEMKT: SPY). These funds buy shares of companies that are part of the S&P 500 to replicate the composition of the index and therefore performance.

So, for example, today Microsoft is the heaviest share in the S&P 500 and the heaviest in the SPDR S&P 500 ETF as well. And if the S&P 500 rises 5%, the index fund will rise as well.

Here’s why tying your performance to that of the S&P 500 is a good idea. Over time, the S&P 500 has averaged a 10% annual gain, meaning that if you stay invested in an index fund that tracks it, you could see your investment grow accordingly.

Of course, there is no guarantee that the index will continue to generate the same gains as in the past, but its composition, favoring the industry leaders of the time, generally allows it to show positive performance in the long term. So there are reasons to be optimistic.

And speaking of the composition of the index, this is regularly reviewed to ensure that it represents the companies that are driving the economy over a given period. Recently Super microcomputer won a place in the S&P 500. The company sells servers and workstations needed by businesses in the high-growth field of AI, and business is booming. Supermicro shares followed, jumping more than 4,000% in five years.

A combination of growth and security

All of this means that an investment in the SPDR S&P 500 ETF gives you exposure to today’s best-performing companies, as well as diversification across sectors. This results in a combination of growth and safety: major players should drive growth, and the inclusion of stocks from various sectors limits the potential for loss if a particular player or sector suffers.

Today, the three largest sectors in the S&P 500 are information technology, financials and healthcare, and eight other sectors make up the rest of the index.

Now let’s see how you could turn your $50 a month into a fortune. If you invest $50 each month in the SPDR S&P 500 ETF over a 35-year period, you’ll benefit from the magic of compounding, or the idea that gains produce additional gains – and the value of your investment could reach more than $162,600.

This considers an average annual increase of 10% for the S&P 500. You would have contributed $21,000 and your returns would total more than $141,000. You can increase your monthly investment to achieve an even greater gain or decrease your contribution depending on your budget while still benefiting from this strategy.

As mentioned, it is impossible to predict future market movements with 100% accuracy, even if the index has moved in some way over time. This calculation should therefore only be used as an example: exact returns vary.

But the S&P 500 is known for rewarding long-term investors, which means it’s likely you’ll benefit from investing in the SPDR S&P 500 ETF over the long term – and maybe only turn 50 $ per month into a six-figure jackpot. . So, right now, investors looking for a stable, long-term growth path might want to forget about Nvidia and invest regularly in this leading S&P 500 index fund.

Should you invest $1,000 in SPDR S&P 500 ETF Trust right now?

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool ranks and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Mad Motley has a disclosure policy.

Forget Nvidia: This Index Fund Could Turn Your $50 a Month into Over $100,000 was originally published by The Motley Fool

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